Ap­ple Pay ex­pands as it vies for broader ac­cep­tance

Kuwait Times - - TECHNOLOGY -

Ap­ple’s year-old mo­bile-pay­ments ser­vice is ex­pand­ing to more coun­tries, banks and mer­chants, as it faces grow­ing com­pe­ti­tion and some chal­lenges be­fore it be­comes as com­mon­place as plas­tic cards.

Ap­ple Pay is avail­able in Canada start­ing Tues­day and in Aus­tralia on Thurs­day. Those are two coun­tries where “tap” pay­ments - tap­ping a phone or chipem­bed­ded card to the store’s pay­ment ma­chine - are al­ready more com­mon than in the US In those coun­tries, how­ever, Ap­ple Pay is lim­ited ini­tially to Amer­i­can Ex­press cards.

In the US, where Ap­ple Pay started in Oc­to­ber 2014, the ser­vice will ex­pand Tues­day to more than 100 ad­di­tional card is­suers - mostly smaller banks and credit unions. Ap­ple Pay al­ready ac­cepts Visa, Master­Card, Amer­i­can Ex­press and Dis­cover cards from most ma­jor banks. In the UK, Tesco and TSB banks will join Ap­ple Pay to­day.

The devel­op­ments come a few months af­ter Google launched its own tap-and-pay ser­vice, An­droid Pay, while Sam­sung started Sam­sung Pay. Both are for An­droid phones, while Ap­ple Pay re­quires iPhones.

GRAD­UAL EX­PAN­SION

Jen­nifer Bai­ley, Ap­ple’s vice pres­i­dent for Ap­ple Pay, said the com­pany is start­ing with Amer­i­can Ex­press in Canada and Aus­tralia be­cause it’s both the card is­suer and the pay­ment-net­work op­er­a­tor, so co­or­di­na­tion is eas­ier. With Visa and Master­Card, in­di­vid­ual banks is­sue the cards, and each bank has its own way of ver­i­fy­ing a cus­tomer’s iden­tity when set­ting up Ap­ple Pay, for in­stance. Mean­while, Ap­ple is work­ing with makers of var­i­ous pay­ment ma­chines to bring tap­ping ca­pa­bil­i­ties to ad­di­tional mer­chants, small and large. When Ap­ple Pay launched, the U.S. had 200,000 tap-ca­pa­ble ma­chines. That’s ex­pected to sur­pass 1.5 mil­lion this year. The growth in­cludes about 100,000 small to medium-sized mer­chants each month, Ap­ple said.

Ap­ple said Tues­day that Cinnabon will add Ap­ple Pay to all its U.S. lo­ca­tions next year, while Domino’s com­pany-owned pizza stores will get it by year’s end. Ear­lier, Ap­ple said Star­bucks will con­duct a pi­lot this year, with a broader roll­out next year, while KFC will launch next spring.

De­spite the mo­men­tum, sev­eral mil­lion more U.S. re­tail­ers still have older ma­chines that lack the right tech­nol­ogy.

PAY­ING AT RESTAU­RANTS

Even if a merchant has the equip­ment, it’s of­ten lo­cated be­hind a counter, out of arm’s reach. At sit-down restau­rants, a cus­tomer needs to get up to make the tap, as op­posed to leav­ing a card with a waiter, at least in the US (In Canada and many Euro­pean coun­tries, it’s com­mon for staff to bring a por­ta­ble card ma­chine to your ta­ble.)

Ad­dress­ing that will re­quire a com­bi­na­tion of ap­proaches, Bai­ley said. She said Chili’s is in­stalling tablets at ta­bles so peo­ple can or­der and pay right there, start­ing in the spring. The restau­rant-reser­va­tion ser­vice OpenTable al­ready lets din­ers use its app to pay at some restau­rants. Other U.S. restau­rants, she said, will em­brace por­ta­ble card ma­chines.

“You’ll see restau­rants really look to in­no­vate,” Bai­ley said, adding that restau­rants can squeeze in more cus­tomers with faster pay­ments, and cus­tomers are hap­pier if they don’t have to wait for the check.

THE US IS BE­HIND

Amer­i­cans are used to plas­tic cards, and many peo­ple aren’t drawn to the in­creased se­cu­rity that th­ese ser­vices pro­vide be­cause banks typ­i­cally waive li­a­bil­ity for fraud. But the dy­nam­ics could change with the grow­ing use of plas­tic cards em­bed­ded with se­cu­rity chips. Chip trans­ac­tions take longer than a tra­di­tional mag­netic swipe, making the con­ve­nience of tap­ping seem more at­trac­tive.

Be­cause other coun­tries have had chip trans­ac­tions longer, they are fur­ther along in ac­cept­ing tap pay­ments, Bai­ley said. She expects US shop­pers will come to ac­cept tap pay­ments, too, now that chip cards are be­com­ing stan­dard. — AP

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